reilly, editor of the ajc, will be reading, cynthia tucker, pulitzer prize winner, i shared that day with her. roast mary mcgee and jim bentley, jack's former colleague. wal have examples of the nelson papers that are knockout at participate l, and i just want to thank all of you and especially our panelists so much. it was just great event and thank you so much for coming. [applause] ..

>> booktv streams live online for 48 hours every weekend with top nonfiction books and authors. booktv.org. >> in 2007 david goldhill's father died from an infection incurred at a hospital due to medical mistreatment. up next, mr. goldhill who is president and ceo of the game show network contends that his father's death was avoidable and questions how the nation's health care system allows over 200,000 summer deaths due to air. this is just under an hour. >> hello, everybody. we are going to get started, if you don't mind. thanks to all of you for coming here today.

i'm a senior fellow at the manhattan institute center for medical progress, and we are delighted to have david goldhill join us this afternoon. for a talk about his new book, "catastrophic care: how american health care killed my father - and how we can fix it." i think that there's too -- when i think about health care i think of to challenges of blind spots that i think conservatives have had on health care. the first is that it tends to be liberals who criticize and critique our health care system, largely because of the large uninsured population. and the response of conservatives is a thing to say, the health care system is just fine, it's the best health care system in the world, don't mess with it, don't change it. i think the second blind spot of conservatives in general but certainly in health care is that we tend to talk about policy, public policy philosophically or

with charts and data. and charts and data are important, but a lot of times the way liberals have one arguments is by talking about the single mother in oregon who doesn't have health insurance and what we need to help her, or the child was born with cystic fibrosis and how that child can't get health insurance. and these are real challenges in our system, and there are other challenges that people who are actually ensure to have coverage who are set up in the way we all think they should be who struggle with the convoluted mess, the extent and the mistakes that arise in the health care system. so with reflection of those two things, in reflection of those two things it's not that surprising it took a lifelong democrat, david goldhill, to write the cover story in the atlantic about how americans health care killed his father.

american health care did not kill his father because david's father was uninsured. david's father had insurance. use on medicare. but because of the unresponsiveness and all the incentives and our system led american health care system cannot really be that concerned about the patient first and foremost, david's father tragically died. and i'm sure he will talk more about that when you hear his remarks. so what's really great about david goldhill's writing, and david's book, is that he not only talks about the real people in our system who are affected, not just the uninjured, but every american who interacts with her health care system and, in a way that makes us understand how much better our system could be. but he critiques it from a free market point of view. he appreciates that are so me things about our health care system that could be better, precisely because it doesn't skew to market principles. one of the great clichés in health care policy debate is that health care is different,

that health care is somehow immune from laws of economics that affect every other aspect of how we live. and what david has done in his book is a great service in that regard and explaining how, in fact, health care is much like other sectors of the economy. david quillen up in new york outside of new york city and nassau county. his father was a psychiatrist. he went to harvard college and then got a masters at nyu. he then became an investment banker doing mortgage finance at morgan stanley lehman brothers where he had a front row seat to fannie and freddie, which is something we might hear more from him in the q&a. and he got involved in television and he is ceo of the game show network and came to policy writing relate in his life because of this tragedy that affected his life. eroded cover story in the atlantic magazine. and then turned that into a

book, and it's an incredibly compelling book, which i encourage all of you to buy. there's copies outside the animals were instructed to say that the next season of the american bible challenge, the game show network highest rated show, is coming on in a few weeks. said the game show network and feel like we are not stealing its ceo from his ceo duties, and we're giving them a plug, too. so please join me in welcoming david goldhill. i'm sure we're going to learn a lot from him today. [applause] >> thank you. i'm sure everyone in your region or blog, but it's a thrill when, as an outsider non-expert, you're mentioned in something. so i think you for that, for the introduction today. thank you, everybody, for coming. i am here really because of what happened to my father. it is what got me interested in health care. some of you may know the story.

my dad died of infection acquired in a hospital, a series of infections actually, and it was very painful as you can imagine an ever difficult experience to go through. even worse for my sister who's an emergency room physician and watched sort of helplessly as my father's care was botched. about six weeks after my dad died, i read an article in "the new yorker" about viral infections which are really nothing about. i read about it because many of your probing family with, but somewhere around 100,000 americans die every year from hospital infections. i'm sorry. let me start again. somewhere around 100,000 people die a year from hospital acquired infections, but most of them are fairly easily preventable. not all of them but most of them. doctors who design protocols to prevent them had failed to get hospitals to adopt them, even

though they were relatively low cost. i used to run a movie theater chain, among many of the jobs i've held for incredible short periods of time, and when someone spilled a soda on the floor, we had a rule as to how quickly you had to mop it up so no one slipped and fell. when you read about an industry where 100,000 people die, and they could fix it and it wouldn't cost much, but they don't. i think the combination of the grief i felt for losing my father, and he sort of businessmen should gaza be about how other businesses are run made me wonder, why do we give this industry a pass about so much? i think all of you in this room, and it's one of the great things about talk about health care, have been patients or have had loved ones were patients. there's roughly 310 million people in this country have a story about health care that we should say, why do we give this industry a pass? we would never accept this in any industry, and yet we do in

health care. and others say well, it's health care. fundamentally different. what i want to talk about today is two things. one is how really it isn't fundamentally different but the way we come to think of it is, and i think it's blinding us to the change in health care that has occurred since the first assumptions that guide our system and many other systems became conventional wisdom. and the second and, unfortunately, more briefly is what should we do about it, to begin to fix these problems. to me, the answer to the question of why health care in this country is so expensive, so wasteful, at the same time so often unavailable to people who needed, and delivers such unbelievably bad customer service that we don't even think of it as customer service, is really the punchline to a number of off-color jokes which i won't tell, but the punchline is,

because they can. and to me it's the most fundamental and important thing to understand about health care is that nobody else in any other service or good trying to get your business can get away with this. they can't. someone will take your business from them. that's not the case in health care. in health care we built a system that has the most perverse incentive and imaginable. more care over good care, more expensive care over less expensive care, and less investment in the kind of things that tell your patient customers that you care about them. service and handling of information and all the other little things we see. and it's great in politics to find a villain in this, the evil drug companies or insurers, or the unions or whoever your villain is. but the problem is, you can spend anytime health care what you find are people who are often so motivated, there are people are devoting their whole life to the care of others, even

in many of the evil institutions you will find lots of people who got into it and are still in it because they think they're helping others. so you have this interesting mix, a system that i regard as catastrophic in a number of ways, and people who seem to be motivated by greed reason for being there. and unique the bridge between understand those two, the incentives in the system, the economic incentives for bad outcomes are so powerful that it overwhelms the effort of good intentioned people. and not exactly very politically catchy phrase, right? down with the incentives is not going to get anyone elected to power, but i think it's the key to understanding how the system works. in health care we decide we don't want to be the customer. we want a circus be the customer. private insurers are the real customer, medicare, medicaid dcms and state agencies, they are the customer. and interestingly, if you step

back from the intricate debates about health care and ask yourself, how well does the profit center work in health care. it works perfectly. the health care providers perfectly need the demands of these surrogates, which are very different from ours. i want to talk about how. let me talk about some of the biggest assumptions we have in health care. the biggest is actually reflected in our language. nobody, or almost nobody, almost nobody talked about health care practice. we all talk about health care costs. it's interesting in the political debate about health care. he always hear the word cost as if there's some independent thing going on, a certain amount of kryptonite that provides all the health care, we only have so much of it, it's priced on another planet. every cost as we all know is somewhat priced, the price of someone's labor, the someone's capital. and yet in health care i think it's incredibly blinding, we think that there's a cost of

things. and if we can discover it and pay as little close to it, we've done well. a lot of health care policy is about discovering the cost. in the book i joke about the cost of congress. so the cost of tom cruise's $20 million. tom has just about as many molecules as any of us do. he actually is pretty much as much training as an actor as any of us do. [laughter] but none of us have any problem if you're making a movie paying the cost of congress. he will sell more than $20 million worth of tickets. it's also his price. tom cruise goes to work as a janitor. he doesn't get to say my cost is $20 million. because his value isn't. and yet in health care, if you listen to how we try to make it health care, it's about discovering that thing, that cost, as if it's independent of supply demand, technology and all the factors that tom cruise is cost of $20 million.

there's a lot of allusions in health care, and probably the most important allusion in health care i think is illustrated by what i recall the tale of two women. one of them is elizabeth warren. elizabeth warren argued, and i think in some ways correctly, that one of the issues of the financial crisis on earth is that a lot of people applied for subprime loans without understanding what it costs them. they were misled by teaser rates or poor documentation or bad disclosure, and that this was one of the things that congress could correct them to try to correct. that very same principle, hiding from us the cost of our action, is the foundation of our health care system. and let me talk about a second woman who, her name is becky, and she's a 23 year-old who just towarstarted work for my compan. so in the book, in here, i'll talk about what health care is

going to cost becky. like most people in the québec he thinks someone else's magically paying for her health care. one of the fastening things that make you, becky is really successful. she probably will be. she's an extraordinary, capable sales assistant about to be promoted to saleswoman, and she probably will be very successful. becky thinks she's going to get to the top 1% of income. she also thinks she could never afford health care on her own. now, it's really a problem if the system is such that even someone in the top 1%, who's paying for the other 99%? that's what she believes. in fact, if the cost of health care increases by exactly zero from now until becky dies, becky will put $1.2 million in two the health care system. if the cost of health care increases only at the rate the affordable care act estimates for the next 10 years, in other words, if it's successful, she will put in 1.9 million.

if she has a spouse who is working, but becky is the breadwinner and becky provides the insurance, it will add another half million dollars. the two of them open up at two a half million dollars into the health care system. let me mention a couple things about becky. she's entry-level. these assumptions us into important things. she never gets rich. it's not her idea of what's going to happen but it's statistically likely. her income will grow two or 3% for the rest of her career. and she will never get sick. the key element of her health care system is her show dance. becky thinks that i'm paying for her insurance. i'm not, she is. one thing every economist left and right agrees on is that over time, not tomorrow, if becky walks in tomorrow and says you can have your health insurance back, gimme back my money, that wouldn't happen. but over time health insurance -- i think most people now know it. it is too. you would rather have them pay

than not they tomorrow, but over time it's often at what they were willing to pay you. that's a big part of it. part a we all know about party medicare has gone up significantly. i pay it, she pays. i paid on her behalf. she tasted. right now 20 going up to 25 and 30% of our federal tax burden goes into subsidizing health care. i'll come back to the. 10% going to 50% of our state tax burden goes to finance medicaid. the point is when you add all this money of its a flood of money. why does it matter? the reason it matters is, our health care system is so inefficient that the average person, not only could afford their health care, but would save an enormous amount of money if we transferred this money back to them and spend it to the customer. we going to do it, but it changes your perspective on what's happening. a lot of you may be thinking, that well, what about those who can't afford a? what about those who don't have a job? we will spend somewhere around

$850 million on subsidizing medicare and medicaid. it's what we spent last year. we will spend more this year. you could give 100 million americans $8500 a year with that money. a family of four, $34,000, give it to them every year of their life. so, in fact, you could take our current system, our current spending, included but he come and have a completely consumer directed system. we are not going to do it but we could. that's how much money we spent. the father, argued ago i'm not sure he would want to be called as the father of our system -- the 50th anniversary of an article he wrote saying dean of the public health care? it's totally different than everything else. the consumer doesn't know anything. the doctors do everything and the push. it's the argument for having and ensure or medicare or medicaid working on our behalf. the problem is that article was written in 1963.

before trip advisor. a lot of the asymmetry and information that he was writing about is the longer the case. in fact, it's beyond just the fact that we can exchange information on the internet. it's that health care itself has changed to become far more individual, far more about probabilities and a lot less about frankly being an auto mechanic. the problem with your engine, you fix it, you're done. very little of health is like that. most of it is you have these alternatives, there's a variety of options depending on who you are. and affect every patient is encouraged to do this. but there's a bigger conceptual problem with what he wrote. and it's the bitter problem. you probably all know the old joke about you guys being chased by a bear in the forest. one guy stopped to take office shoes and switches into speaker to his friend says you idiot, you can't outrun a bear in sneakers. he said i don't need to outrun the bear. i need to outrun you. the implications to which the

argument has been is that because we're such terrible customers of health care, insurers will be better. we've got a 50 year history of this. have been as effective as us? one of the great misconceptions about consumer driven health care is it depends on consumers. but it doesn't. wal-mart wasn't created because an angry mob marched o on human markets ended we demand lower prices. what happened is some guy woke up one day and said, i know how i'm going to make my billions. no one does that in health care. because we are not the consumer. i want to come back to this point because it's the most misunderstood things about those of us who say we want consumer driven health care. we want consumer driven health care because consumers are idiots. ken arrow was right. we don't know anything about anything by the way. since this article, it's been in almost every industry an article about how dumb we are when it comes to buying. just like he said it was an usually the case in health care.

it doesn't matter. as a group, having people chasten us, bend over backwards, to buy their product is what causes good behavior. not that we are clever. i want to come back to that one. so the issue really is, sure, we're terrible. with the worst customers of health care. everyone else is worse. that's what we think we should have discovered. this argument is over and over again and every health care argument. nonsense. the other assumption in the system is there some objective amount of health care need. and if you look at medicare and medicaid, one of the ways they are unusual, they say, anything you need we will pay for. now, i'm in favor of a similar policy in cable television. because here's what would happen. if congress said we will pay for all the television you need, we would convince you all you need to watch 25 hours a day.

what's happened in health, we see it particularly and healthier, is when you see and you do, we will pay for all your customer needs, they expand the definition of need. the interesting thing going back to the ken arrow is when the customers absolutely no skin in the game at the moment of purchase, he's more likely to say yes, not less likely. the concern was we as consumers are too weak. the doctor tells us to do something, we will just do it. this doesn't make us more like a. the reason for medicare and medicaid has grown so much is that. it entitlement. not to beneficiaries. that's the way people think of it. it was entitlement to providers. to figure out ways to create need. my mother is an extremely healthy woman who is -- i'm 52, so she is slightly over there. i know she's on medicare and she's an incredible healthy. she works. there's nothing wrong with it. she sees 12 or 13 doctors a

year. and a lever to press. my mother was a breast cancer survivor in middle age, got through it. when you look at the medicalization of senior citizenship that medicare has caused, one could make the argument, rarely made, that medicare is bad for seniors. i do know how many of you are aware but there was this study published last year that said that one out of three medicare patients had surgery in the year of their death, completely shocking. because surgery for an older person has far more health costs, forget about money, health tells, greater risk and emotional and recovery issues. one out of three in the other death. one out of five, 90 euros in the year of their death. and everybody in health care knew how to read this. this is a system gone amok. 40% of people 75 and older in this country are taking five or more prescription drug. some of this may do good. i might argue whether that's good or bad. that's not what i'm talking about. what i'm talking about is as

long as the system says whatever you need will pay for, the definitiodefinitio n of need will expand and, unfortunately, we will expand without reference to the whole customer, the whole patient. it expands more in reference to the industry, and if you look at how we have gotten to 50% of the country having a chronic condition, i think is best understood as industrial policy rather than health care reality. if you want everybody to nod in agreement at a conference of health care experts, you mentioned another piece of conventional wisdom, that on its face we should've realized. and that is, 70% of health care expense in any given year are spent by the 10% of the population that most needs it. everyone knows what that means, right? you have to have insurance. insurance. that's and usually intended use, right? 70% of all for just 10% of the people. and as far as i know no one in

health care, and to my book am ever asked about what other industries? because what's interesting is if you look at health care, it's just an expensive but in service. that 70% is probably the least intensive use of various. under 10% of us by 100% of the cars in any given year. under 10% of us have a wedding in any given year. under 10% of us are attending college in any given year. under 10% of us will buy a refrigerator in any given -- i could go on forever. in fact, maybe to kill the rest of my time i should do that, but i think there's something very important about what i called island thinking. which as far as i know, when i served on health, this is what i got. no one has ever said wait a minute, what makes health care unusual is in any given year, 30% of the money, or for those of us who like to think and dollars, a mere $800 billion, is spent by the 90% of us who are

not sick. it's literally the exact opposite of what this conventional wisdom means. and i'll take it even for the. they key phrase is in any given year. so when we started funding health care through insurance, it started like fires. your house burn down. that is a tragic event. but in health care all of our houses are going to burn down. sad, true. i hope i'm not the one actually bring this to people's attention, but a very large percent of us in this room are going to be in that 10% for a few years of our lives. now, what makes health care different is that some small percentage of the population is in that 10% for much of their lives. but that's an argument for ensuring that. the fact that your house burns down is not an argument for ensuring your furniture wearing out. and the problem in health care

is that everything we talk about is as if there's just one way, there's one answer. there should be just one way of paying for health care. so we take the most extreme examples, which will affect very few of us, and use it to cover the bulk of the economy, as if we regulated restaurants according to the needs of those who are starving. and one can argue, we need to help those who were in that 10% for many years of their lives. but that's different from saying, and that system should fund the $800 billion spent by the other 90% every single year. again, assumptions that are fundamentally -- my dads bill for the hospital killing him was $636,687, and my mother's care was $990, which she didn't pay. if you're in business, you know the bill is a very important way to communicate with the customer what is this bill communicating?

this bill says you're lucky to be on medicare. because none of the prizes in the build their resume us to anything medicare pay, the prices make no sense whatsoever. they have no meaning. to do so i said what if i move data out of the hospital, put them at the four seasons? i'll pay for the most expensive place in town. and put a million bucks of hospital equipment and a four seasons from. i know people there. maybe they let me do that. got positions to spend two hours a day with them, roughly an hour 15 is more than enough bill. and gave him round the clock service. so that would priced, certain it did make a deal with the hotel, at $150,000. to taken out of the hospital, to re-create the experience of the most expensive hotel in town. that leaves like $5000 over for miscellanies and supplies. which is good. now, i'm not complaining that we

only had to pay $990, but in pointing out that if you've ever received a health care bill from your insurer, from medicare, anywhere, it's all fiction. and you know, fiction is great. i'm in the entertainment business. i love fiction. the problem is people will say things like, i didn't have health insurance, i could've never -- i had a friend who needed an appendectomy and they charged him $10,000 for it, which is insane if you ever actually had one. but that's what the bill says. my friends is how good i've ever afford this without insurance? i don't have $10,000 lying around. of course, his company had paid $18,000 a year for his insurance. so if they've given the money to him and his family would have run out of benefits while before they run out of money. it affects the way we think about this.

might have got a bill for something like $400,000, and her chair was 100 bucks. that sounds pretty good. except there's no $400,000. it's completely fiction. and the problem is, it affects or public policy decisions, but even worse if you spend time in hospitals it affects the way they think. it affects the way resources are allocated. my son needed an appendectomy, and we got as all of you have gotten, the first, from the insurer was our medical examiner has determined that we cannot prefer -- approver hospital stay for acute appendicitis with roger. we don't have enough facts to say it was medically necessary. now, this is the real cost of insurance. in a consumer driven system, you don't do any work. they chase you. and a non-consumer driven system, you are driven insane.

to get your money back. and that's part of that works, right? that's part of what turning over being the customer to an intermediary does. one of the answer is that the political system has indeed with this is, well, let's reform. let's get rid of fee-for-service or let's change the rates at which people were. the interesting thing about reforming payment is like so much in healt health care, and a discussion of her how to handle the medicare problem, like so much in health care is based on this enormous fallacy that an industry won't respond, that everything will stay the same. the reagan administration implemented the most important payment reform really in the history of american health care, which was the bundled payments for almost all inpatient hospital goods under what's called the prospective payment system. so you've got a diagnosis, they will pay for diagnosis.

and at the time, which is 1983, the bulk of revenue in the health care system came from two things. physician services, paying for doctors, and the day spent in a hospital. let me take a successful this reform was. it's extraordinary. the number of days in a hospital, per medicare beneficiary, has declined by 63% in the 30 years since the proposal. the days spent in the hospital, total, by medicare patients, even though the population of medicare has almost doubled, declined by over 50%. the days per procedure in a hospital has declined by 80%. so whenever politicians talk about payment reform to drive change, could you imagine greater change in basically cutting the core practice of the health care industry at the time, inpatient services, in half. so as we know, the cost of

health care declined by 50%. i'm sorry. [laughter] i'm sorry. i get excited about successful reform, and i missed a couple of lines. so if you cut demand for somebody's product per day by 50%, for total by 50%, you must have crushed them. here's what actually happened. the average amount medicare reimburses, per day, in a hospital has grown by five times since 1983. so 60% decline in the number of patients, five times increase in the price. we should all be so lucky. i want to be in that business. now, there's another cystic which is entirely sort of irrelevant but fascinating. -- statistic. hospitals tell medicare what their costs are so that medicare can compare the price they paid hospitals costs.

so in those 30 years that medicare increased the price paid hospitals by five times, hospitals reported that their costs had increased eight times. so the interesting thing is, our demand collapsed. in any industry that would've been devastating, right? medicare paid five times more, but the hospitals say they are now only getting reimbursed 40% of their costs, down from 70%. and what of my most fun, you know, you have to stand outside to see this, medicare and says that hospitals perform medicare services at a loss. and that loss has been growing. you can see the numbers. they show a margin. the loss has been growing over the last decade. sense of medicare patients are the bulk of our hospital patients, nobody has ever successfully explained and medicare is never asked, why people are still building hospitals. because you think if you lose money on every patient, you want

to reduce bottom, not increase volume. there's a lot of that in healthy. there's a lot of things in health care we don't waiting to come if i get off the island and think in terms of the real world, you know, if gm's prices declined in half they probably wouldn't be increasing -- be building new factories. i want to spend one more moment on price because prices are -- they are one of the things most visitors in health care. these things drive the way human beings see service. one of the things we is known is that we pay for health care. the question is how do we pay for health care. one of the arguments i'm making today is how we pay drives the type of care we are getting. at the centerpiece of government policy on health care is that medicare pays less for every service than private insurers to come and medicare pays even less. it's called cost-sharing on the island. cost shifting on the island, excuse me. it's almost impossible to

compare these prices for any specific service, so the data i have actually seven years old, the real good study of a civil service, and it's for michigan. at the time in michigan, private insurance with paying just under $800 for an appendectomy to the surgeon. medicare was paying $676. medicaid west bank $335. sounds like a great deal for medicaid. now, many of you have been in the cheeseburger markets. you can buy a cheeseburger at mcdonald's 4909 cents. you go to the cheesecake factory, sit down, have a more leisurely meal, and by a cheeseburger for $11.95. you can go to our neighbor, the bistro, a by cheeseburger for $32. now, if you lived in health care, what you would say is this cost shifting between mcdonald's and db bistro. here's my fear.

my fear is we're seeing three different health care systems. the reason that medicare providers can sell their services at a loss is because they do make enough profit. a package but it's one of the reasons that seniors are getting ever and ever more care. as you drive prices down you get an industry to find ways to sell more to those same customers. and if you look at medicare carefully, what is being sold to patients, it's hard to believe, they are not more in mcdonald's business. mcdonald's actually makes more money than db bistro. they will sell you five but they will give you much service. medicaid i'm afraid some else's happen. when you look at medicaid, it's interesting. the rate of growth in medicaid services has gone up, rapidly. but not all of them. the things that you can do high-volume, testing, certain types of surgical procedures are going to the roof. what we think of more normal

care, care that takes a lot of time and expertise, has flattened. i think what you see in medicaid is an industry response to low reimbursements. if i've got a business model that lets me do volume, i'll take a medicare patient and if i don't, i won't. again, this sounds very wonky, but think of what it means for the patient. we think of health care as the single thing. can we teach her health care? the affordable care act just put 15 million more people into medicaid. if, in fact, what we're doing is driving different types of service, then we have an issue. we were talking about how few geritol doctors are less. medicare will cost $600 billion this year. seniors are the best customers of health care system. there are no gerontologists left. there's only 5000 left in the country. how is this possible? it's possible because the way you reverse as you can get this kind of care but not this kind of care. and when we talk about health care, we talk about health care.

we don't say there's too many spinal fusions, there's too many hip replacements, there's too many people on pills, there's too many -- we talk about health care as if it's one thing, as if it's a cheeseburger. but even cheeseburgers go up. and my fear is what we are missing in our system is this. we are driving care decisions based on these economic incentives. it's not as simple as the island, which isn't this great, we are making private insurers bear more of the costs. i want to spend one more second on customer service -- consumer service. 50 years ago, there were 20,000 computers in the world. and 10 years from that incident was there were 250. there are probably 100,000 people who knew how to use them. computers were extraordinarily complex. today, almost all of us are tearing at least one on us.

several have to, three, four, five. all of us, everywhere on earth. what happened as we all know is that everybody became really smart about computer science. we all were required taken in school. we were all ph.d. so this product that 50 years ago, only 1000 people of us could use, can now be successful you by 7 billion of us. but, of course, that's not true. when you that health care is impossibly complex for consumers, one of the things to remember is that nobody in health care can make money by making it easy for you. nobody. think about the computer. i don't understand anything about how any of my computers work. i've got a lot of them. i've got three phones, i've got laptops, i've got tablets, right? is not that into how they work but it's also not because there's one that is the clear

superior computer that we all must have. it's, in fact, because of the opposite. this most impossibly complex thing on earth, this thing that was used only by nasa and the irs and ibm. is used by all of us because nobody said to complicated for consumers. somebody said i know how to make a living, i'm going to figure out how to make it smaller and smaller. rand released a study this month that said that the $81 billion in savings we were going to get by making an investment in health i.t. produced no savings. too bad because the government put a $25 billion of the $40 billion investment in i.t. why? why did a $40 billion investment giving everybody a box and software not produced any savings? if you been to a hospital or doctor you can see it in front of you, right? i mentioned i took my son for an

appendectomy last month. we walked in to see the surgeon. we had to fill out a seven page for but he had a ruptured appendix, so fortunately i filled out the form for him. i don't know what he would've done if he was an adult. the surgeon said almost certainly a wretched appendix. let's get a quick scan to confirm. we went to the same hospital, four floors down, to get the skin. and we filled out the same seven page for. before they would seem. we made the obvious point that we filled out the same form in the same hospital just 15 minutes before, but i know you've all been through it. we then had to go to the emergency room. where, just for fun, while they're waiting for a room i said, i wonder if i want to pay for cash what would have been? and it really was the equivalent of saying, i have a bomb strapped to my chest last night and going to blow this hospital

unless you perform this appendectomy. that panic, this belief, what is cash? [laughter] and then, of course, because he was in pain and i thought, this will just slow it down, his search was delayed because they have no computerized way of booking or tracking upwards. have someone run back and forth. he was in a lot of pain so they gave him morphine, or at least they try to pick a road in order for morphine. the pharmacy was, i would guess, 20 yards away from where he was being held in operation. it took an hour and a half to fill that order. i imagine many of the people in this room have a variety of views on gun control, but trust me if my wife had been armed, this story would have had a very ugly ending. [laughter] and you see that, and what that

is, is that's what i like to call the little picture. all right, forget about the big picture now. forget about his party solvency. part a doesn't exist. but let's not argue about whether it's often. what it is is all of us, every single one of us going into this system that we need constantly. that's been fully integrated in our lives, that many people are managing life so issues or to improve our lives, or in extreme cases it our lives, all good things. being treated as if we shouldn't be there. we're lucky to be there. and seeing mistakes ranging from the eye rolling, having to thought the same form twice, having your test results lost. having one position pashtun physician not talk to another. having hospital staff change over faster than you can learn their names. it is truly tragic.

when the inspector general of medicare look at how good a job they would doing in reducing the rate of accidents in hospital, they discovered that one out of four of medicare admissions now leads to a health problem created by the hospital. so one out of four compares to nothing. it doesn't exist anywhere else in the world. that type of rest is nonexistent you can't get that risk in combat. this is so unusual, and we give it such a pass. and one of th of the reasons wet such as is we let it live on this island if we don't ask in terms of the money we put in or the money we take out, how we are treated, how we see performed, our compares to our dry cleaner. we don't do that. we need to tell the i've been back. we need to put under the microscope of everything else. we need to recognize that health

care in the future is going to be a part of our lives regularly. this is not a house burning down, and we need to rethink the basic. i think i will leave it there if that's all right, and take questions. [applause] >> thanks, david. and i can say as someone who's read the book, i can tell from his remarks in connection interesting book. and i say this not merely to be polite to our kids. it's a really terrific book. one of the best health care policy books i've read. i encourage you to buy one outside. with that, let's add some questions from the audience. stanely i see is back there. spent fortunately -- >> unfortunately -- [inaudible] do you know what the average survival rate was about 50 years ago? of humans. the turn-of-the-century, people,

the average survival was in the high '50s, even lower. we now live to the high '80s into the '90s. older folk like us, and that's because of health care we have. let's give him a little credit. so i think -- >> let me make my other point. >> blanket attacks. let me take the i.t. computerization. you forgot to tell us that "the new york times" the other day, there was an article by reed davidson that the study that was done by rand that said that computers would solve all our problems, decrease cost and everything, and if you ask anyone in medicine would've told you it's going to increase cost, you press a button and give higher level of care. we all knew that. no one dared ask a physician because we may know something. they forgot to tell us that funding was funded by ge, and that wasn't known so they sold all the computers. the hospital on that, got $140 million to implement them,

and even my techie friends are crying because it takes too long because what it said at a computer instead of taking care of a patient. the other point i'm going to make is that engine, a story the other day in "the new york times," that nothing to do with hospitals or doctors. that they are fined $750 million. and i'm an oncologist, but they should've gone to jail the way they were pushing their products. coming in with him just once, do this, combined this, make more money, change more vials. putting more medicine into vials to make more money. and some the doctors should have gone to jail. the government right after this just let them do the drug again. so just let's take a little easy on the doctors. you want to talk about, the sanitizing. i'm sorry your dad died, okay. so just address that issue. >> i ask or think those are a couple of very important points but one of which i agree with, one of which i don't. let me -- i think the first rand study which showed the

80 billion failed for a slightly different reason. and i think they should've been obvious to us. the first rand study said you get 80 billion in savings of a $40 million investment. that's a 200% return. i don't know what anyone in the skin under my. i know there are some money managers here but i'm getting less than 200%. i want to achieve that. what rand did and ask is why the industry hadn't made the investment itself. why would the industry that could achieve $80 billion in savings not make a $40 billion investment, the greatest investment root of our lifetime. and in not asking that question they missed what was going to happen. what was going to happen is that in health care, and i'm talking about industrial structure, not about people, nobody can monetize easy billion dollars in savings. when you're dry cleaner invested in i.t., it's not because dry cleaning is more technologically advanced and it's not because

their people are better trained. it's because losing shirts costs money. that's it. that's why all of us do it. and rand missed that. $80 billion in savings translated into increased profits and losses. the most technologically advanced hospital chain in the country is widely regarded as tantamount to an amount has had our technology investments has cost us between 25 and $51 million a year in profits. in the rest of the economy, when i.t. helps you save money, you can pass the savings onto consumers. that's what wal-mart did. omar is a technology to be. it's all about inventory management. but i think, whether the rand study was right or wrong is relevant. it's obvious on its face it's not going to work. because and $80 billion return on $40 billion doesn't need government intervention to happen, anywhere in an economy.

and we talk about your broader point becaus because i think ise import. you're right that lifespan has gone up a lot and to continue to go out. but i think as most people in the audience now, while some amount of that is attributable to personal health care, a much greater amount is attributable to public health. and it's far greater amount is attributable to our lifestyle. what's interesting about the last 50 years is, while the one area in which we can't definitively argue personal health care has increased lifespan is cardiac care. the both of improvement almost every civil study has shown has been about people stopping to spoke, people drinking less, people having jobs that create your disabilities. and to some extent diet. although obviously some argue that it cuts both ways. there's a question though if you do comparative national work, look at different countries life spans, the difference is in health care. personal health care is almost never measured in oecd numbers.

what we measure it is more -- mortality. what's interesting to study in u.s. sank in and one predictor of your life span now is your education. what's interesting about what we've done in health care, spending 18% over health care on health care, we have nothing left for social priority. all of which are likely to drive -- i'm not putting down the doctors. i'm appreciative of health care, but systemically this is bankrupting us in exposing us to a variety of problems that are really extreme. >> okay, just as a reminder we're on c-span so give your name and your affiliation and keep your question briefly so we can get to as many questions as possible. >> john, fox business. in my television simplistic way, so what's your solution? your wonderful speech, sounds

like an argument for more consumer driven health care, more of a market, but i hear you're a single-payer guy spent i'm sort of a combination of extreme left and extreme right. i just like extremes. i think we need national health insurance, but i think it has to be defined as catastrophic. and i think interestingly what has to happen over time, we need to make it narrower rather than broader. in other words, we need to do the opposite of what governments tend to do, which is expand the mandate. we can't switch to that system today i don't believe without giving everybody the security that the house is burning down actually will be covered. at the same time, we need to drive as much of the 2.7 trillion we're spending back to people. and whether that's getting insurance premiums down to the type of catastrophic levels we're talking to so people can save a lot more of the money, going into encrypted inefficient insurance system to our whether that means turning subsidies away from we will pay for your

health care with all of the terrible incentives and care that is created, to we will give you the money to pay for health care. very different. what i propose, john, is what i propose is working towards a system for all of us are in a single pool, catastrophic plan, that is too narrow and has been aired over a 20 to 40 year period with the bulk over health care running for on health accounts. so that the most customer from the point of view of health insurance industry is us. so that what happened to my father and son is less likely to happen because you're more likely -- that's what i'm trying to get to. it reasonable for what they've done in singapore really and what did than in any other single-payer state. and part of the item is, that more and more health care is truly non-catastrophic and our attempt to cover with insurance is taking the most expensive, most complex, most administratively difficult form of finance and applying it to

things that it is just not intended for. which is not the best way spent unfortunately we don't have much more time but i'm sure david will stick around to sign books and talk to us afterwards. let's thank him once again for his remarks. [applause] >> thanks all of you for coming. [inaudible conversations] >> you were watching the tv, nonfiction authors and books every weekend on c-span2. >> the target of the drug war or the wrong target is what the lesson is for me as a journalist. i think law enforcement on all levels is out there to serving to protect and help us. the ones i met on all levels in the course of the research of this book were generally good people. some of them believe in the task force, they don't realize it's a job in their spending taxpayer money but some, people are trying to do their jobs.

the problem is we need to turn off the tap, 9 million domestic dollars going to so-called enforcement. not new to anybody in this room. but the wider american mainstreamainstrea m is waking up. i live in a place in new mexico with a cowboy hat, old ladies in this post office think barack obama was born in libya, and when i asked when asked and willing to book was about i tell them it's an economic and social announces of why the end of the drug war would be good for america, without fail, the response is, yeah, when is this tragedy in new mexico and where's the drug were going to into? it's not that dangerous compared to the pill and the myth. when we going to stop the rest? the truth is black and white. it's dangerous for me as a journalist come to sound too much of a cheerleader about any

particular issue. people will think teacher, if i'm lucky maybe woody harrelson. the reality is, i'm a journalistic perspective black and white for billions were put back into our economy, while hurting the cartel. i know the statistics that subsided, 70% of the cartel's profits, might be high, but the fact is quite a lot of organized crime financing today is not from heroin and the math. it's from we have american farmers growing, taxing it and on the dutch aside north dakota. north dakota agriculture commissioner is begging, begging to put this plan back to work for america's factories and clothing energy. i went to a sustainable for so a few years ago a few years ago for my a few years ago for my pre-spoke was giving a talk and speakers, others did was a u.s. expert on biofuels. she talking about all kinds of biofuels i had heard of.

filters toxics out of oil. great greater biofuel, and i learned a lot. i said what about cannabis. and she said best there is. best there is. magnitudes better than in terms of per acre. and i said what? don't you know? schedule one felony. we're not even allowed to talk about speak you can watch this and other programs online at booktv.org. >> here's a look at some books that are being published this week.